Luxury Homes in the U.S. Are More Expensive Than Ever
Additionally, a record number of buyers of high-end properties purchased with cash at the start of the year
Of the 50 most populous metros in the U.S., luxury prices rose the most in Providence, Rhode Island. Getty Images
Luxury homes in the U.S. now cost more than ever, according to Redfin’s measure.
In the first quarter of the year, luxury homes—defined as those in the top 5% of their metro area based on market value—sold for a record median price of $1.225 million, a year-over-year increase of 8.7%, according to a report from Redfin on Friday.
Demand for high-end homes has held up amid rising mortgage rates as many luxury buyers are purchasing homes in cash. In fact, 46.8% of luxury homes that were bought during the three months ending Feb. 29 were paid for in cash, the highest percentage in at least 10 years and a 44.1% increase from last year, according to Redfin.
Starting in January, Redfin recorded annual growth in luxury home sales for the first time since August 2021, leading to a 2.1% year-over-year increase in high-end home sales in the first quarter.
“People with the means to buy high-end homes are jumping in now because they feel confident prices will continue to rise,” said David Palmer, a Redfin Premier agent in the Seattle metro, where the median sale price for luxury homes is $2.7 million.
New listings are up annually as well, by 18.5%, but it hasn’t been enough to suppress price growth, as total listing inventory is still well below pre-pandemic levels. Though, there was a 12.6% increase in the number of luxury homes for sale in the first quarter, the largest increase on record, according to the report.
Of the 50 most populous metros in the U.S., Providence, Rhode Island, saw the largest increase in luxury prices in the first quarter, which rose 16.2% year over year to a median sale price of $1.4 million. New Brunswick, New Jersey, was close behind, where the luxury median sale price jumped 15% to $1.9 million.
Luxury prices dropped in just eight metros, with New York seeing the largest decline, as prices fell 9.9% to $3.25 million. Austin, Texas, had the second-biggest drop in prices, which fell 6.9% to $1.62 million.
